Even the ultra-rich still look for ways to improve their business. Few people in the US are more successful than Bill Gates. But that doesn’t mean the 58-year-old billionaire knows everything.
There are still important business lessons to be learned by America’s richest man — and who better to learn them from than Gates’ friend and fellow billionaire Warren Buffett?
In 2013, Gates traveled to Omaha, Nebraska, for Berkshire Hathaway ‘ s annual shareholders meeting. “It’s always a lot of fun, and not just because of the ping-pong matches and the newspaper-throwing contest I have with Warren Buffett,” Gates writes in a LinkedIn post. “It’s also fun because I get to learn from Warren and gain insight into how he thinks.”
Gates outlined the three most important lessons he learned from Buffett. Here are the highlights:
Look At The Big Picture
When Gates first met Buffett, his immediate instinct was to focus on the surface of his success: picking and investing in stocks. But Gates quickly learned that key to Buffett’s success ran much deeper — it’s about the big picture of a business. “He has a whole framework for business thinking that is very powerful,” Gates writes.
Instead of focusing on the day-to-day details of the market, Buffett looks at overall growth. “He talks about looking for a company’s moat — its competitive advantage — and whether the moat is shrinking or growing,” Gates says. “He says a shareholder has to act as if he owns the entire business, looking at the future profit stream and deciding what it’s worth.”
Be Honest With Shareholders
Buffett famously takes time every year to send a letter to his shareholders, a practice that inspired Gates to start doing the same. While Buffett’s letters offer business and investing insights, Gates believes Buffett’s candor is what makes them stand out. “He’s been willing to speak frankly and criticize things like stock options and financial derivatives,” Gates says. “He’s not afraid to take positions, like his stand on raising taxes on the rich, that run counter to his self-interest.” Gates’ key takeaway: transparency is highly appreciated.
Value Your Time
“No matter how much money you have, you can’t buy more time,” Gates reminds us, noting that Buffett understands this better than anyone. Buffett makes an effort to be available to his close advisers and always finds time to personally answer phone calls from them. “He’s very generous with his time for the people he trusts,” Gates says.
However, Buffett knows how valuable his time is, and doesn’t waste it in useless meetings, Gates says. Buffett prioritizes his time and spends it in ways that matter most to him.